"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, August 08, 2012

Commercial property tax assessment shenanigans in DC

The Washington Post reports that the Office of Tax and Revenue has settled a number of commercial property tax assessment challenges, costing the city close to $50 million in tax revenues. See "Dramatic rise in D.C. tax office settlements."

From the article:

Tax office officials say they have embraced the settlements to save costs on tax appeal litigation. But the reductions have spurred anger and confusion among some tax office employees whose concerns have filtered out to internal auditors and the FBI, which has launched an investigation, according to three people familiar with the matter who spoke on the condition of anonymity because they fear they could lose their jobs.In the past, the city’s chief financial officer, Natwar M. Gandhi, who oversees the tax office, has sharply criticized property tax reductions issued by the city’s independent tax appeals board. Gandhi has supported a change in law that would give the District the right to appeal the board’s reductions in D.C. Superior Court — a move meant to protect the city’s tax base. Yet in a year when the District’s commercial sector grew, tax supervisors signed off on settlements with property owners before the appeals process played out.

This is interesting for a couple reasons.

First, the city's commercial properties are selling for record prices, because comparatively speaking, Washington DC is one of the world's most stable real estate markets.

I'm not saying it's the same kind of thing going on here. But it doesn't look good.

After all, there is a cozy relationship between DC's top officials and the real estate industry, after all, commercial real estate drives the local economy and provides a significant proportion of the city's tax revenues--the Central Business District generates not quite 20% of the city's revenue.

And there is the constant problem of the Commercial Property Tax Assessment process being subject to extra-normal suasion. E.g., that's how R. Donahue Peebles got his start in real estate, see "From a Native Son, Politics of Getting Rich (Post, 2007).

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About Me

I am an urban/commercial district revitalization and transportation/mobility advocate and consultant and a principal in BicyclePASS, a bicycle facilities systems integration firm, based in Washington, DC. Urban economic competitiveness is dependent on efficient transit and mixed use, compact places. Therefore, I end up writing mostly about mobility and urban design. While I am based in and write about Washington, DC issues, I try to write so that "universal lessons" are evident in the entries.